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Start Your Own...

The financial calculus of five classic New York retail dreams, based on a combination of real figures and estimates.

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BAR: Lower East Side

Rent
$6,000 a month for 700 square feet.

Construction and Licenses
$75,000, including $4,500 for a two-year liquor license and a $5,000 attorney’s fee. If it’s not already a bar, keg machinery and refrigeration will cost thousands.

Staffing and Insurance
$13,000 a month for two bartenders, an off-the-books bar back, and basic liability insurance for the business.

Initial Inventory
$5,000 in liquor will get you going and, one hopes, will last you less than a week.

Total Start-up Costs
$110,000

Where The Money Is
Make rent on Friday night alone with berserk well-drink markups. A $10 vodka bottle yields eighteen to twenty shots that, mixed with $4 to $5 worth of tonic, will fetch $100 pre-tips.

Perils
More than any other business, a bar’s dependence on cash makes it vulnerable to theft and staff shenanigans.

Why Do It
“It’s an instant social life,” a bar owner says. “If our friends want to see us, they can come to the bar.”

• Break even by selling 160 $5 Brooklyn Lagers a day.



BIKE SHOP:Upper West Side

Rent
$10,000 a month for 900 square feet.

Construction and Licenses
$20,000. No special licenses needed unless you’re planning to sell used bikes (a resaler’s permit).

Staffing and Insurance
$12,900 a month. Bike-shop help (make sure they’re good at repairs) is $10 an hour, with insurance for those working more than twenty hours.

Initial Inventory
$50,000 in bikes and parts, plus $2,000 in professional bike-repair tools.

Total Start-up Costs
$90,000

Where The Money Is
Repairs and accessories. The markup on complete bikes is low: about 30 percent. The average bike-shop profit margin is one percent; the most successful top out at 7 percent.

Perils
It’s a heavily seasonal business that withers in winter, requires a lot of room, and sells a durable, rarely replaced product.

Why Do It
One reason, and one reason only. “I could make more money temping, and so could all my employees,” says a bike-shop owner. “You have to be in it for the love.”

• Break even by selling two $700 bikes a day.


HANDBAG SHOP: Smith Street

Rent
$4,500 a month for 500 square feet.

Construction and Licenses
$30,000, including a permit for an outside sign ($500).

Staffing and Insurance
$6,500 a month for two reasonably glamorous employees, if the store is closed on Mondays and Tuesdays (as many are).

Initial Inventory
$25,000 in materials (if you’re selling originals) or stock.

Total Start-up Costs
$72,500

Where The Money Is
Original or exclusive designs allow for higher markups.

Perils
Tastes are fickle, and cash is obsolete. Visa or MasterCard’s 3 percent cut eats deep into the profit margin.

Why Do It
It’s unfettered self-expression. “Sometimes the thing you have the least confidence in sells best,” says the designer-owner of a bag emporium.

• Break even by selling three $200 purses a day.


FURNITURE STORE: Tribeca

Rent
$14,000 a month for 1,800 square feet.

Construction and Licenses
$100,000 is a typical number, although the more “designed” spaces may cost up to $300,000 to build.

Staffing and Insurance
$18,000 a month for four employees and a manager. Movers and off-site storage may cost another $1,000 a month.

Initial Inventory
$80,000 in furniture (40 pieces for the sales floor at a mean price of $2,000).

Total Start-up Costs
$238,000

Where The Money Is
Proprietary lines designed in-house and made in China or Latin America make the most profit. Get larger orders by targeting architects, not retail customers.

Perils
The encroachment of home-design chains with reasonably priced quality products (Crate & Barrel being the main offender).

Why Do It
“Furniture shapes something beyond style,” says a Tribeca shop owner. “It shapes culture. You can make quite an imprint on people’s lives.”

• Break even by selling one $1,800 sofa a day.


KIDS’ STORE: West Village

Rent
$5,000 a month for 600 square feet.

Construction and Licenses
$20,000 for custom-made racks and an outside marquee. Quirky, cheap touches like bright paint and Ikea furniture go far.

Staffing and Insurance
$4,000 a month for two employees, one of whom is the owner, and business insurance.

Initial Inventory
$40,000 in clothes, books, and toys.

Total Start-up Costs
$77,500

Where The Money Is
In kids’ clothes, the markup can approach 400 percent, whereas the profit margin on toys and books tops out at 100 percent.

Perils
The changing demographic. Baby booms come and go; before you know it, a stroller heaven is overrun with surly tweens.

Why Do It
“The customers are so nice,” says the proprietor of a West Village boutique. “And being here in the neighborhood is the best.”

• Break even by selling fourteen $48 party dresses a day.


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